Peapack-Gladstone Financial Corporation announced fourth quarter 2025 financial results showing substantial growth across key metrics. The company recorded net income of $12.2 million and diluted earnings per share of $0.69 for the quarter ended December 31, 2025, representing a 26% increase compared to the previous quarter. For the full year, net income grew by 13% to $37.3 million, or $2.10 per share, compared to $33.0 million, or $1.85 per share for 2024.
The company's deposit transformation strategy proved particularly effective, with total deposits growing by a net amount of $460 million, or 8%, over the last twelve months to $6.6 billion at December 31, 2025. Core relationship deposits increased $828 million for the year as the company continued to replace higher-cost deposit balances with new relationships at lower funding costs. Noninterest-bearing deposit growth was especially strong, increasing by $316 million, or 28%, during 2025.
Net interest income increased $6.0 million, or 12%, on a linked quarter basis to $56.5 million for the fourth quarter of 2025 compared to $50.6 million for the third quarter. The net interest margin expanded significantly to 3.08% for the quarter ended December 31, 2025, compared to 2.81% for the previous quarter and 2.46% for the same period in 2024. This expansion was driven by improvement in the cost on average interest-bearing liabilities and continued execution of the company's single point of contact private banking strategy.
Douglas L. Kennedy, President and CEO, stated that the results demonstrate the company's ability to digest significant investments while delivering earnings growth, improved operating leverage, and meaningful shareholder value. He emphasized that strong core deposit growth, disciplined pricing, and consistent execution have driven eight consecutive quarters of net interest income growth. The transformation of the deposit base has become a key differentiator for Peapack Private, with the company positioning itself as the premier boutique alternative to mega banks in metro New York.
The company's wealth management division showed robust performance, with assets under management and administration growing by $1.2 billion to $13.1 billion at December 31, 2025, compared to $11.9 billion a year earlier. New business inflows totaled $291 million in the fourth quarter and $1.0 billion for the full year 2025. Wealth management fee income reached $16.1 million in Q4 2025, representing 21% of total revenue for the quarter.
Commercial banking activities also contributed significantly to the results, with total loans growing by $738 million, or 13%, to $6.3 billion during the twelve-month period ended December 31, 2025. Commercial and industrial lending accounted for 55% of new business originations during the fourth quarter, with C&I balances representing 44% of the total loan portfolio at year-end. Loans were originated at a weighted average coupon of 6.60% during the year, resulting in an incremental spread of more than 400 basis points on new business when compared to funding sources.
The company's capital position strengthened during the quarter, with tangible book value per share increasing 10% to $34.99 per share at December 31, 2025, compared to $31.89 at December 31, 2024. Regulatory capital ratios remained well above well capitalized standards, with the Tier 1 Leverage Ratio at 9.89% for Peapack Private Bank & Trust and 8.87% for the company. Additional details are available in the company's Q4 2025 Investor Update on their website at https://www.peapackprivate.com and via a Current Report on Form 8-K on the Securities and Exchange Commission website at https://www.sec.gov.
Asset quality showed improvement during the quarter, with nonperforming assets decreasing to $68.2 million, or 0.91% of total assets, at December 31, 2025, compared to $84.1 million, or 1.13% of total assets, at September 30, 2025. The company proactively addressed problem credits, resulting in a meaningful reduction in nonperforming assets while maintaining appropriate reserve coverage. The allowance for credit losses stood at $71.0 million, representing 1.14% of total loans at year-end.
Operating expenses increased to $53.5 million for the fourth quarter of 2025, primarily driven by expenses associated with the company's ongoing expansion into New York City and Long Island, including higher premises and equipment expenses related to the opening of two new Long Island offices. Despite these investments, the company noted that the pace of operating expense growth is moderating as expansion initiatives mature. The company declared a cash dividend of $0.05 per share payable on February 26, 2026, to shareholders of record on February 12, 2026.
